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Special analysis: What to do with electronic records

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in Office Management,Payroll Management,Records Retention

Hardly anyone keeps paper records anymore. Naturally, the IRS knows this, so auditors ask for your electronic accounting records.

Problem #1: Software files often contain data beyond the audit years.

Problem #2: Software programs routinely create metadata for every data file created.

So how do you keep the IRS from snooping around the personal and confidential business information that’s contained in those files?

Data and metadata

Regardless of how your accounting records are kept—on paper or electronically—the rule is the same: You only need to produce the documents auditors ask for in their Information Document Request (IDR).

An IDR will most likely ask you to provide a copy of your original accounting software backup files. Backup files may be provided on CDs, DVDs, or flash/jump drives, but the files must be exact replicas of your backup files. You can’t, for example, ­create new files by re-inputting the data or convert...(register to read more)

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